Participation influencing change readiness in strategic change: the mediating role of perceived appropriateness

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Participation influencing change readiness in strategic

change: the mediating role of perceived appropriateness

Master thesis, first draft, MscBA, specialization Change Management University of Groningen, Faculty of Management and Organization

December 4, 2013 JEROEN HOP Studentnumber: 1769642 Veluws Hof 41 3852 JM Ermelo phone: +31 (0) 341-559831 mobile: +31 (0) 6-12846443 e-mail: j.hop.1@student.rug.nl Supervisor/ university ………..

Supervisor/ field of study J.C.L. Paul

Faculty of Economics and Business, Groningen

Acknowledgement: Helpful feedback on earlier drafts was provided by Louk Paul. I thank the

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Participation influencing change readiness in strategic

change: the mediating role of perceived appropriateness

Abstract: The influence of participation on change readiness in the context of strategic change,

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Contents

TESTING THE HYPOTHESES ... 15

Participation and perceived appropriateness. ... 15

Participation and readiness. ... 16

Participation, perceived appropriateness and readiness. ... 16

DISCUSSION ... 17

DIRECTIONS FOR FURTHER RESEARCH ... 17

LIMITATIONS ... 18

IMPLICATIONS ... 18

REFERENCES ... 19

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Introduction

According to Holt, Armenakis, Feild and Harris (2007), the process of change implementation consists of three phases; readiness, adoption and implementation. This idea is in line with the planned change approach of Lewin (1951), who distracts unfreezing, moving and refreezing as the three primary stages of planned change. Following this, change readiness can be seen as an essential step in the unfreezing phase of planned change. Thus, it has a positive relationship with change success (Armenakis, Harris & Mossholder, 1993). This is supported by Pasmore and Fagans (1992), who argue that appropriate changes may fail to be successful, simply because the affected members of an organization are not ready. They define change readiness as “the cognitive precursor to the

behaviours of either resistance to, or support for, a change effort.” This definition is further specified in the study of Holt et al., (2007:235), in which change readiness is defined as;

“Readiness collectively reflects the extent to which an individual or individuals are cognitively and emotionally inclined to accept, embrace, and adopt a particular plan to purposefully alter the status quo.”

This definition will be used in this study.

The process of change is seen as an important predictor of the readiness for change

(Bouckenhooghe, Devos & van den Broeck, 2009). Within the process of change, participation is an important factor, and it is believed to significantly influence the readiness for change (Holt et al., 2007; Soumyaja, Kamalanabhan & Bhattacharyya, 2011). The concept of participation has been defined in multiple ways (Lines, 2004; Bouma, 2009). According to Heller (1998:42), the dimensions in the following definition capture the total concept of participation; “Participation is the totality of forms and of content intensities by which actors secure their interests or contribute to the choice process through self-determined choices among possible actions during the decision process”. However, this definition does not constitute different forms or levels of participation. Pasmore and Fagans (1992:385) argue that participative acts can be divided among multiple levels of participation, “ranging from the lowest level (simply joining and participating in a system), to contributing (helping to improve the existing system), to collaborating (seeking to involve or support others in changing the system), to creating (transcending the current system)”. In order to form an applicable definition, the definition of Heller (1998) and levels of Pasmore and Fagans (1992) will be combined and defined for this research case;

Participation is the degree of active involvement of employees in decisions regarding strategic change.

This definition is rather similar to the one used by Bouma (2009) in his dissertation, which indicates it should be a proper one.

5 create organizational support, contribution and a sense of control over change amongst subordinates (Armenakis & Bedeian, 1999; Saksvik et al., 2007), reduce the resistance towards change (Lines, 2004; Neumann, 1989), lead to higher quality decisions, because of the specialized knowledge of employees (Bouma, 2009; Eccles 1993; Kim & Mauborgne, 1998), lead to a better understanding of the meaning and possible advantages of change (Bartunek, Greenberg & Davidson, 1999; Bartunek, Rousseau, Rudolph & DePalma, 2006), support the readiness for change, lower the stress level of employees and create support for change (Amiot, Terry, Jimmieson & Callan, 2006; Choi, 2007; Coch & French, 1948; Coyle-Shapiro, 2002; Holt et al., 2007; Kotter, 1995; Lines, 2004), positively influence the overall success of change (Basinger & Peterson, 2008; Bouma, 2009; Lines, 2004; Roberts, 2003). Following this, one could argue there is sufficient evidence to advocate the use of participation in organizational change. However, several studies have questioned the effect of participation. For instance, Basinger and Peterson (2008) argue that the positive influence of participation remains uncertain. They concluded that certain stakeholders who participated did not fully understand the change and were hesitant to adopt it. For participation to have a positive effect, they argue that the participants should be carefully chosen. Furthermore, Rafferty and Simons (1996) found that participation was positively related to readiness for change in fine-tuning changes. In contrast, such relationship was not found for transformational changes. To add, a negative side effect of

participation is found. Participation could result in a lack of direction for the change (Conger, 2000). This negative effect of participation is considered counterproductive for the success of organizational change (Heller, 1998).

The contradictory beliefs on the effect of participation shows this field of research still contains unknown parts (Cheney & Cloud, 2006; Elias, 2009). Miller and Monge (1986) stated that the influence of participation depends on the situation. However, they are unclear about what factors it would depend on. Bouma (2009) acknowledges that it is still unclear whether a direct relationship with change success exists. He suggests an indirect relationship between participation and

organizational success. He argues participation could have intermediary effects, which sometimes have a positive and sometimes have a negative influence on the success of change. The idea of intermediary effects of participation could explain the contradictory nature of previous outcomes on the success of participation in change literature. Bouma (2009) distinguished four intermediary effects of participation; intrapersonal attitudes, intrapersonal relations, job pressure and job contents. Considering the aforementioned positive, questionable and negative effects of

participation, it is hard to believe these intermediary effects found by Bouma (2009) are the only four.

The controversy is also present in the field of strategic change. For instance, strategic change could lower organizational commitment of employees, which could have detrimental effects for the readiness of the change (Lines, 2004). Underlying reasons for this effect are that lower level

employees tend to show less organizational citizen behaviour (Van Ypere, Van den Berg & Willering, 1999) and other behaviours which have a positive influence on organizational effectiveness (Mayer & Schoorman, 1992; O’Reilly & Chatman, 1986).

6 Kotter, 1995; Lines, 2004). Readiness seems to be closely related to resistance to change (Armenakis et al., 1993). However, they argue that readiness could lower the intentions to resist a change. This supports the study on the relationship of participation and change readiness. Since readiness and resistance are closely related and participation is believed to lower resistance, it is expected that:

Hypothesis 1. In strategic change processes, higher rates of participation lead to a higher change readiness.

Continuing, participation is said to lead to a greater understanding of the change itself (Bartunek et al., 1999). Participation generally has an effect on understanding of possible advantages or gains of change, through empowerment and positive feelings about the change(Bartunek et al., 2006). Furthermore, it is argued that impacts of change are moderated by the meanings or attitudes that change recipients form (George & Jones, 2001). Also, Wanberg and Banas (2000) argue that

participation leads to a higher acceptance of change. To add, participants tend to evaluate a change higher than non-participants (Bartunek et al., 1999). Moreover, participation is believed to create support for a change initiative, which leads to higher change success (Kotter, 1995). The

aforementioned effects of participation are labelled rather differently. Nevertheless, these effects seem rather similar and explain the influence of participation via the beliefs or perceptions of the change recipients on the change itself, the content of it.

According to Armenakis et al. (2007), change recipients’ beliefs consist of five variables; efficacy, valence, principal support, discrepancy and appropriateness. It is argued that the change recipients’ beliefs influence the readiness of change (Armenakis et al., 2007; Holt et al., 2007). The variable of appropriateness is closely related to change content (Armenakis et al., 2007). In their study, appropriateness of a change is described as the belief that “a specific organizational change is

necessary to eliminate the discrepancy” (Armenakis et al., 2007:484). Thus, the content is believed to be appropriate for the discrepancy of the situation. As mentioned before, participation is thought to influence the beliefs and perceptions of the change content. To add, change recipients’ beliefs are argued to influence change readiness (Armenakis et al., 2007; Holt et al., 2007). The mediating effect of the belief of appropriateness on the relationship between participation and change readiness has not been researched so far, while aforementioned arguments give reason to suggest that

appropriateness might influence this relationship. This supports further research into the effects of the belief of appropriateness.

The concept of appropriateness of change lacks a clear definition. Therefore, I will aim to build a definition based on information already available. Appropriateness is named as a change recipients’ belief (Armenakis et al., 2007). Following this, recipients have an opinion on appropriateness. Hence, appropriateness could be better labelled as perceived appropriateness. According to Armenakis et al. (2007), the belief of appropriateness is related to the belief of discrepancy. Discrepancy is defined as; “the belief that a change was necessary” (Holt et al., 2007:251). A perceived appropriate change should take away this discrepancy. The content should thus be correct for the situation.

7 difference being that it would be personally beneficial (Holt et al., 2007). The aspect of personal valence will be left out of the definition. This choice is supported by the scale of items provided by Armenakis et al. (2007), wherein appropriateness measures success for the organization and does not contain items on personal valence. This together leads to the following definition:

Perceived appropriateness is the extent to which the content of the change is perceived as being organizationally beneficial and correct for the situation.

Participation is argued to lead to favourable change related attitudes (Lines, 2004; Nurick, 1982; Ostroff & Schmitt, 1993). According to Armenakis et al. (1993), appropriateness is a change related attitude. There are several reasons for the effect of participation on change related attitudes. To begin, the view of participants in the change is believed to be different from that of outsiders, because participants are thought to understand the change differently than outsiders (Basinger & Peterson, 2008). Thus, participation leads to a better understanding of the meaning of the

change(Bartunek et al., 1999). This could have an influence on the evaluation of the content (Armenakis et al., 2007). Also, content is seen as being dependant on participation in a context of strategic change (Lines, 2004). He gives two possible reasons for this relationship. Firstly,

participation can give subordinates control over the content. Secondly, participation should lead to closer contact between the subordinates and the change agents, so the content can be explained clearly (Lines, 2004). Furthermore, participation is thought to lead to strategic decisions of higher quality (Eccles, 1993; Kim & Mauborgne, 1998). They argue that more relevant skills, competencies and information is supplied by active participation in each part of the strategic change process. This implies that the content of the change will be of higher quality. Moreover, participation should affect the assessment of the change, because of the psychological effect of consistency. Consistency with the participation in the change is maintained through a positive assessment (Salancik, 1977). Following this, participants in change tend to assess these changes more highly (McLagan & Nel, 1995). Based on these findings, it is assumed that:

Hypothesis 2. In strategic change processes, higher participation leads to a higher perception of change appropriateness.

The studies of Armenakis et al. (2007) and Holt et al. (2007) both use appropriateness to measure readiness. They think this relationship holds, because of multiple reasons. Firstly, the idea that a change would be beneficial for an organization should lead to higher readiness (Holt et al., 2007). Secondly, the need for change, or discrepancy, is believed to support readiness (Armenakis et al., 1993; Holt et al., 2007). Whilst forming the definition of perceived appropriateness, it was found that discrepancy is closely related to the subject. Furthermore, the change recipients’ beliefs, of which appropriateness is one, are believed to be positively influencing readiness (Armenakis et al., 2007). Therefore:

Hypothesis 3. In strategic change processes, higher perception of change appropriateness leads to higher change readiness.

8 Hypothesis 4. In strategic change processes, higher participation leads to higher change readiness, mediated by the perceived appropriateness of the change.

The aforementioned hypothesis form the framework for this research. They lead to the conceptual model, visualized in figure 1.

FIGURE 1. The conceptual model

The outcomes of this study should help get a better understanding of the effects of participation on the readiness of change. It will test whether perceived appropriateness is a mediating variable in this relationship. This could bring clarity into a set of effects found by multiple authors. Moreover, it should give further insight into the variable of appropriateness, starting by producing a clear definition.

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Methods

The change in study occurred in a magazine distribution organization. The organization is roughly divided into two separate parts, namely the main office and the distribution centre. The organization has approximately 360 employees in total. However, this study will focus only on the main office of the organization, since the change was implemented there. Furthermore, the change did not affect the distribution centre by a great deal. Thus, useful answers are to be found in the main office. The organization operates in an oligopoly market. Together with the only competitor, the

organization distributes magazines in the Netherlands. The organization serves around 1000 retail shops and approximately 170 different publishers. Prior to the strategic changes, both organizations in the market were trying to cut costs and distribute against the lowest price. They operate in a declining market. Every year, the amount of magazines sold declines by around 5 to 10%. To add, the clients served, retailers and publishers, put pressure on the organization because of the economic crisis. All clients are sharp on costs. Following this, the margins were dropping rapidly. Therefore, it was decided that the organization could not continue to cut costs and that it should change its strategy. This was decided during the year 2010 and implemented in the fall of the same year. The vision for the new strategy was to ‘be the indispensable guide for publishers’. Since a great deal of knowledge and data is available in the organization, the new strategy embodied the organization as ‘the body of knowledge within the market of magazines.’ This should strengthen the position of the organization in the chain. These objectives were aimed to be reached by envisioning a healthy magazine shelf for retailers. This was the main goal. In order to accomplish this goal, the organization should ‘concentrate knowledge and resources of key publishers’, ‘try to bind publishers on added value, instead of on price’, ‘be the most serious partner for retail’ and ‘excel in the daily operations’. This implies that the strategy is focussed on marketing-power. It is driven by the wishes of publishers. The first phase of the change was to envision the strategy. This was done by a select group of higher level employees. After informing the rest of the organization, the strategy was embodied by a set of projects. These projects aimed to change every operation that needed change in order to execute the new strategy. Different levels of participation are to be expected, since the projects in the organization usually have a few key project members, who are responsible for the outcome. The project itself is run by a project group, which report to these key members. Next to this, employees are asked for their input by this project group.

Data collection

10 announced for one of the respondents. Two coupons, each worth 25 euros, could be won by

responding to the questionnaire. Furthermore, I walked around the office on one of the busiest days to physically ask employees to fill out the survey. This lead to a total of 62 respondents, which accounts for a response rate of 57%.

The averages of the outcomes of the respondents’ characteristics (age, gender, department, tenure and education) were compared to the averages of these characteristics of all employees in the office. This was done together with the Human Resource Manager. This did not yield significant differences between the response group and the non-response group. Respondents varied widely in age, education, tenure and all departments were present in the response group. Also, the mix of males and females was about equal to the total average mix. Therefore, it can be concluded that there is no non-response bias in this study.

Measures

In order to show clear differences in the levels of participation, perceived appropriateness and the perception of change success, a 7-point Likert-scale, ranging from 1 = totally disagree, to 7 = totally agree, was used. Since the change was implemented in the autumn of 2010, the content of the strategy and relevant projects concerning the strategic change were provided in the survey.

Participation. No universal set of questions is available for scholars to research the effects of

employee participation (Dachler & Wilpert, 1978; Swanberg-O’Connor, 1995). Therefore, the chosen scale was altered, so that it would be specific to the situation. These alterations were based on two exploratory interviews with managers who were said to know relatively much about the change. The chosen scale is the one of White and Ruh (1973). This scale was chosen, because it covers the most relevant aspects of participation (Shadur, Kienzle & Rodwell, 1999). Bouma (2009) also used this scale as input for creating his set of items. Next to this, it had an alpha of .81. After the interviews, it was clear that the words ‘your job’ in the scale, should somehow be altered to ‘the projects’, since the strategy change consisted out of multiple projects. Also, the questions are converted to statements, in order to assess all variables in the same way. An example of a new formed item is therefore; “In general, I have much say or influence on how I perform in my projects group(s).”

Perceived appropriateness. Two widely used scales were found to measure perceived

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Readiness. Multiple scales which measure change readiness are to be found. For example, the

Readiness of Organizational Change Measure (ROCM) developed by Holt et al. (2007). This scale measures readiness by four factors, namely; appropriateness, management support, change efficacy and personally beneficial. This is similar to the scale of Armenakis et al. (2007), who measure

readiness with five factors; discrepancy, appropriateness, efficacy, principal support and valence. The problem with these scales is that appropriateness is part of the readiness measure. This is not

beneficial for this study. The Organizational Change Questionnaire–Climate of Change, Processes, and Readiness (OCQ-C, P, R) developed by Bouckenhooghe et al. (2009) provides a solution. This scale measures readiness separately from other constructs. Furthermore, this scale has an advantage over the ROCM scale, since the ROCM scale is tested in only two organizations, which both

implemented a change in the organizations’ structure(Bouckenhooghe et al., 2009). Moreover, it is useful in both incremental and transformational change situations (Bouckenhooghe et al., 2009). The scale scores high on validity and reliability and has a Cronbach’s alpha of .84, .69 and .84 for

intentional, cognitive and emotional readiness respectively. Therefore, this scale will be used. An overview of the total set of items used can be found in Appendix A.

Assessment

The data was first tested on two important general assumptions when doing quantitative research. These assumptions are the non-existence of missing data and outliers, which could both severely influence the outcomes (Hair, Black, Babin, Anderson & Tatham, 2010). Subsequently, it was found that missing data was no problem in this dataset. Every respondent answered all questions. Furthermore, there was a wide variety in the answers to the respondents’ characteristics variables; age, tenure, working department, education and gender. Also, after checking the averages of the outcomes of these variables with the Human Resource manager at the company, no significant differences in the averages of the entire workforce was found. Therefore, it could be assumed that the respondents are a random sample from the population. Moreover, the scatterplots of the outcomes were examined and no influential outliers were found in the process. This was to be expected, since there was high variety in the characteristics of the respondents and the answers. Following this, the data could safely be further examined.

In order to examine data from several independent variables and one dependent variable, factor analysis and multiple regression are the most common used types of analysis (Hair et al., 2010). According to Baron and Kenny (1986), a mediating relationship can be best tested by performing regression analysis. Therefore, these two tests were performed. The data should be assessed on the specific assumptions underlying these tests (Hair et al., 2010). To start, at least 50 observations are needed to perform factor analysis and at least 30 for regression analysis (Hair et al., 2010). This assumption has been met, although the amount of 62 observations does demand caution in the interpretation of the results. Furthermore, departures from normality, homoscedasticity and linearity are not desirable in both tests (Hair et al., 2010). Especially when performing regression analysis, not meeting these assumptions could have severe influence on the outcomes. In factor analysis a

departure from these assumptions will lower the correlations, thus they have to be less accounted for separately (Hair et al., 2010).

12 Before performing this analysis, Bartlett’s Test of Sphericity was used to see whether the correlations between the items were significantly large to support performing factor analysis (Hair et al., 2010). After this, the outcome was tested on the criteria for factor analysis. Firstly, the eigenvalues of the factors should be larger than 1.0. Secondly, the total variance explained should be above 60%. Thirdly, the scree plot was examined and lastly, the sample size was 62, so factor loadings of at least .70 were needed for the factor analysis to be statistically significant (Hair et al., 2010).

The outcome of the factor analysis was used to form summated scales for the variables. These summated scales were the input for the regression analysis (Hair et al., 2010). Also, these scales turned out to be useful for the technique which measures mediating relationship via regression (Baron & Kenny, 1986). However, the summated scales did not comply to the assumptions

underlying regression analysis. Their distributions were significantly deviant from normality. This was tested by the skewness and kurtosis measures. Therefore, the scales were squared, which remedied the problems. After this, the regression analyses could be safely worked out.

The Baron and Kenny (1986) method was used to test the mediating relationship. The mediating relationship in this study is between participation (P), perceived appropriateness (PA) and readiness (R), the independent-, semi-dependent- and dependent variable respectively. This method uses three steps. In step one, linear regression is used to see if the independent variable, P, significantly

influences the semi-dependent variable, PA. In step two, again linear regression analysis is needed to test the relationship between the independent variable, P, and the dependent variable, R. In the final step, multiple regression is to be used with both independent variables, P and PA, on the dependent variable, R. In this last step, the B value for the semi-dependent variable, PA, should be statistically significant. Moreover, the B value for the independent variable, P, should be significantly lower than its value in step two (Baron & Kenny, 1986).

Results

The variables of respondents’ characteristics, namely; age, gender, tenure, department and education, did not yield any significant relationships with the outcomes on participation,

appropriateness nor readiness. The correlations of these variables with all other variables testing participation, perceived appropriateness and readiness were all low (<0.3) and insignificant. Since the statistical tests performed to study the relationships (factor analysis and regression) are based on these correlations, it can be stated that the characteristic variables have no influence in this study and can therefore be neglected. The only significant correlation was between age and tenure, which is to be expected for obvious reasons. Following this, the remainder of this chapter will focus only on the variables concerning participation, perceived appropriateness and readiness.

Correlations

Table 1 shows the means and standard deviations of the items and the correlations between the items. The items measuring participation, perceived appropriateness and readiness were almost all significantly related to each other, with the items of perceived appropriateness and readiness

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Data reduction

The variables correlated significantly in table 1. In order to test whether the use of factor analysis was appropriate, Bartlett’s Test of Sphericity was performed, of which the outcomes can be found in table 2. The outcome is significant (p < .01), so the correlations give sufficient reason to use factor analysis.

After performing factor analysis, it turns out that there is sufficient support for the extraction of three components. Evidence for this is presented in table 3. The three components have an

Eigenvalue which is sufficiently high (>1.0) and the total variance explained for the three components is 87.76%.

The components themselves did not give desirable answers, therefore multiple items had to be deleted. These items loaded on two components. The outcomes strongly relate perceived

appropriateness and readiness. It was mentioned earlier that appropriateness is a strong predictor of readiness in the studies of Armenakis et al. (2007) and Holt et al. (2007). This means that

respondents who perceive the change to be appropriate, are likely to be ready for change. Also, the sample size may not be sufficiently large to derive differences between these variables. Following this, variables 17-22 were deleted from the readiness scale and variable 4 was deleted from the perceived appropriateness scale. This led to the distribution among three components shown in table 4.

The reliability of the outcomes were measured by using Cronbach’s Alpha. The results are shown in table 5. The alpha for participation is .99, for perceived appropriateness it measures .89 and for readiness it is .95. A minimum value of .60 is widely used (Hair et al., 2010). Thus, the three chosen factors with the reduced amount of variables can be safely used in the regression analysis.

Approx. Chi-Square 978.46

Degrees of freedom 66

Significance at 5% level

.00

Table 2. Bartlett's Test of Sphericity

Bartlett's test

Component Eigenvalue % of Variance Cumulative %

1 4.72 39.34 39.34

2 3.05 25.42 64.76

3 2.76 23.00 87.76

15 After this, summated scales of the variables were formed, to be used as input for the regression analyses. The descriptive statistics of the summated scales are to be found in table 6. After the scales were squared to solve normality problems, the distribution of the participation variable was still skewed. This can be explained by the fact that many employees did not participate in the change, which leads to answers in the lower area. The mean of this variable (12.52) is therefore considerably lower that both other means (27.39 and 29.74). However, the skewness is only slightly significant and the correlations provide sufficient reason to proceed with the regression analyses.

Testing the hypotheses

Participation and perceived appropriateness. In order to test step one of the Baron and Kenny

(1986) method and H2, linear regression was used with participation as independent variable and

Variables 1 2 3

Participation

1. Superiors listen to me .95

2. Influence in decisions .95

3. Influence in projects .94

4. Decide myself how to do job .94

5. Influence on job content .95

Perceived Appropriateness

6. Change is adequate .78

7. Change is suited for organization .77

8. Change will let us function better .83

9. Change has positive effect on daily job .79

Readiness

10. Willing to put energy in .87

11. Significant contribution .90

12. Devote myself .82

Table 4. Rotated component matrix

Component

Variables Cronbach's Alpha N of Items

Participation .99 5

Perceived Appropriateness .89 4

Readiness .95 3

Table 5. Reliability statistics for the chosen factors

Summated Scale Variables N Minimum Maximum Mean Std. Dev. Statistic Std. Error Statistic Std. Error

Participation 62 1.00 49.00 12.52 15.14 1.04 0.30 -0.25 0.60

Perceived Appropriatenss 62 1.56 49.00 27.41 10.53 -0.39 0.30 -0.28 0.60

Readiness 62 2.78 49.00 32.60 12.38 -0.80 0.30 -0,05 0.60

Table 6. Descriptive statistics of the Summated Scales

Skewness Kurtosis

16 perceived appropriateness as dependent variable. The results are reported in table 7. The

relationship explains a significant amount of variance (adjusted R2 = .21, F = 17.38, p < .001). The B value is .33. These values support H2 and step one of the method used.

Participation and readiness. Step two of the method tests H1, the relationship between

participation as independent variable and readiness as dependent variable. The outcomes are presented in table 8. The results are rather similar to the ones in table 7. Again, the relationship is significant and explains a substantial amount of variance (adjusted R2 = .15, F = 11.92, p < .001). The B value measures .33 and it can be concluded that the criteria of step two are met and H1 is

supported.

Participation, perceived appropriateness and readiness. In the final step of the Baron and

Kenny (1986) method, both H3 and H4 are tested with the use of multiple regression. In this analysis, participation and perceived appropriateness were the independent variables and readiness was the dependent variable. The results are shown in table 9. The model is significant, with .35 of the variance explained (F = 17.48, p < .001). It is to be seen that the B value of participation has

diminished to .13. In contrast, the B value of .61 for perceived appropriateness is substantial. This B value of the influence of perceived appropriateness on readiness sufficiently supports H3.

Furthermore, the outcomes fully support the mediating relationship. In the final step of the model, the B value of the fully independent variable, in this case participation, has to be significantly lower than in the first step. This assumption holds in this situation. The B value has severely diminished. In this case, the influence of participation on readiness is partially, albeit strongly, mediated by

perceived appropriateness. Following this, H4 is fully supported as well.

Variable B R2 Adjusted R2 F Significance

Participation .33 .23 .21 17.38 .00

Note: N = 62

Table 7. Results of Regression Analysis of Participation on Perceived Appropriateness

Variable B R2 Adjusted R2 F Significance

Participation .33 .17 .15 11.92 .00

Table 8. Results of Regression Analysis of Participation on Readiness

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Discussion

Overall the results give reason to conclude that participation has a positive influence on change readiness in strategic change, mediated by the perceived appropriateness of the change. This means that participants in the change perceive the change as being more appropriate as non-participants and are therefore more ready for change. The results show participation has a strong influence solely on change readiness. Furthermore, participation has a positive effect on perceived appropriateness. However, when participation and perceived appropriateness were both independent variables measuring readiness, the immediate effect of participation was diminished. This means that the mediating relationship is substantial, since a B value of zero would mean that the relationship was fully mediated by perceived appropriateness (Baron & Kenny, 1986). Following this, the influence of participation on readiness is almost completely explained by perceived appropriateness.

These conclusions provide support for the statement of Oreg, Vakola and Armenakis (2011), who suggest the different constructs regarding change recipients’ reactions towards organizational change are thoroughly investigated, however their interrelatedness should be researched. In their article, an overview is given from studies on change recipients’ reactions towards change.

Participation and perceived appropriateness were both described as being one of many antecedents of the consequences of change. This study shows that there is a connection between these two antecedents, hence it partially answers why participation positively influences change readiness. This is useful, because it shows that antecedents may be interrelated and it proves one of these

relationships. This gives rise to the question as to whether other preceding constructs are interrelated as well.

Directions for further research

Following the conclusions and considering that appropriateness is thought to be a change recipients’ belief, participation might relate to other change recipients’ beliefs as well. According to Holt et al. (2007), the remaining beliefs are change efficacy, management support and whether the change is personally beneficial. Coincidently, one of the items which measured participation in this study, was “my superiors listen to my ideas and suggestions”. This is not the same as management supporting the change, albeit it shows that the constructs could be related. Furthermore, one could suggest that a change is more personally beneficial for a person participating in the change process. This supports the idea to further investigate the relationships between participation and the change recipients’ beliefs. Moreover, this study focuses on the context of strategic change. It might be interesting to see whether the same constructs have the same relationships in other types of change.

Bparticipation Bperceived app. R2 Adjusted R2 F Significance

.13 .61 .37 .35 17.48 .00

Note: N = 62

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Limitations

Although these outcomes provide new insights into the relationship between participation and readiness, the conclusions should be drawn with precaution. This has several reasons. Firstly, this study contains a relatively low amount of respondents. Therefore, only several respondents had participated in the change. It is reasonable to think these participants might have been the initiators of the change, which could logically mean they perceive the change as being more appropriate. Secondly, the perception of the appropriateness of the change of all respondents might have been coloured by the change outcome, since it was tested about a year after the change was

implemented. In this case, a high level of successfulness of the change could implicate a high

perception of appropriateness, because they now know it was successful and therefore appropriate. Thirdly, the fact the questions were asked about a year after the change had occurred, might have had influence on the responses. The respondents had to dig in their memory to answer the questionnaire, thus the answers could be slightly inaccurate. Lastly, the measurement scales were translated and altered somewhat, in order to fit them to the organization. This could create some error in the measurements.

Implications

From a managerial perspective, this study could be rather interesting. This research shows that in order to create readiness for strategic change, the employees should participate in the change. In this way, the participants should perceive the change as being more appropriate, which increases their readiness. Creating readiness for change is useful, since it is believed to have a positive effect on change successfulness (e.g. Armenakis et al., 2007). Managers of change should thus find a way to raise the employees’ perception of the change. This can be done by letting them participate in the change. If this is not possible, another solution has to be found. The perception of appropriateness was defined as ‘the extent to which the content of the change is perceived as being organizationally beneficial and correct for the situation’. Following this, managers of change could precisely

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23

Appendix A: Survey Questions

A list of relevant projects and an overview of the content of the strategy were provided in the survey.

General questions: 1. Age. 2. Sex. 3. Tenure. 4. Education. 5. Department.

Questions on participation (White & Ruh, 1973):

6. In general, I have much say or influence on how I perform in my projects group(s). 7. I am able to decide how to do my job in the project(s).

8. In general, I have much say or influence on what goes on in my project group(s). 9. In general, I have much say or influence on decisions which affect my project group(s). 10. My superiors are receptive and listen to my ideas and suggestions.

Questions about the perceived appropriateness (Armenakis et al., 2007):

11. I believe the proposed organizational change will have a favourable effect on our operations. 12. The change in our strategy will improve the performance of our organization.

13. The change that we are implementing is correct for our situation.

14. When I think about this change, I realize it is appropriate for our organization. 15. This organizational change will prove to be best for our situation.

Questions on change readiness (Bouckenhooghe et al., 2009):

16. I want to devote myself to the process of change.

17. I am willing to make a significant contribution to the change. 18. I am willing to put energy into the process of change.

19. I think that most changes will have a negative effect on the clients we serve./ 20. Plans for future improvement will not come to much./

21. Most change projects that are supposed to solve problems around here will not do much good./